(a) You are an audit engagement manager of a public listed client of Walter & Co. Theaudit senior has informed you that they have completed significant audit proceduresfor the final audit of this client. However, after your review of the currnt audit files,you noticed that they have not performed the audit procedures for searching contingentliabilities.Required:(i) Define contingent liability and state the THREE (3) conditions that are requiredfor a contingent liability to exist.(ii) Elaborate any FOUR (4) audit procedures commonly used to search for contingentliabilities.

Contingent means an event that may occure in future.…

Answered: 1 are an au it senior ha

Business

Accounting

1 are an au it senior ha

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Concept explainers

Market Efficiency

Market efficiency refers to the market's ability to provide investors with all available information about investment options for buying and selling securities. Market efficiency reflects the true value of securities without undervaluing or overvaluing them. When the quality and quantity of information increase, the market becomes more efficient, allowing it to reduce arbitrage and obtain higher market returns from investment. In a well-functioning market, everyone receives all information completely and immediately at no cost. It opens up a plethora of opportunities for investors to access various investment options.

Question

(a) You are an audit engagement manager of a public listed client of Walter & Co. The
audit senior has informed you that they have completed significant audit procedures
for the final audit of this client. However, after your review of the currnt audit files,
you noticed that they have not performed the audit procedures for searching contingent
liabilities.
Required:
(i) Define contingent liability and state the THREE (3) conditions that are required
for a contingent liability to exist.
(ii) Elaborate any FOUR (4) audit procedures commonly used to search for contingent
liabilities.

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